Ruff v. Benefis Health Sys.

• Decision Date: 27 April 2022
• Docket Number: WCC 2020-5051
• Citation: 2022 MTWCC 7
• Parties: LISA RUFF Petitioner v. BENEFIS HEALTH SYSTEM, INC. Respondent/Insurer.
• Court: Montana Workers Compensation Court

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2022 MTWCC 7

LISA RUFF Petitioner
v.
BENEFIS HEALTH SYSTEM, INC. Respondent/Insurer.

WCC No. 2020-5051

Court of Workers Compensation of Montana

April 27, 2022

Submitted: February 11, 2021

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND JUDGMENT

DAVID M. SANDLER, JUDGE

Summary: Petitioner requests a lump-sum conversion of her PTD benefits on the grounds that she needs it to afford the necessities of life, manage her debt, and preserve the use of her arm. She also argues that a lump-sum conversion is in her best interest. Petitioner contends that she will use the money, as set forth in her financial plan, to pay off debt, buy a house, modify the house, buy a modified disability vehicle, and make investments for her future. Respondent argues that Petitioner does not have the financial need required for a lump-sum conversion because her monthly income exceeds her expenses, the principal and interest payments on her student loans have been temporarily suspended, she is able to make the minimum monthly payments on her credit cards, and she has other, less-expensive options to preserve the use of her arm. Respondent also argues that a lump-sum conversion is not in Petitioner's best interest because her financial plan is flawed.

Held: Petitioner's request for a lump-sum conversion of her PTD benefits is denied. Petitioner neither demonstrated that she has the financial need required to justify a lumpsum conversion nor that a lump-sum conversion is in her best interest.

¶ 1 The trial in this matter was held on January 27, 2021, in Great Falls, Montana, and on February 11, 2021, via Zoom video conference. Petitioner Lisa Ruff was present and was represented by Matthew J. Murphy. Respondent Benefis Health System, Inc. (Benefis) was represented by G. Andrew Adamek. Wendy Fisher, claims adjuster, was present on behalf of Benefis.

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¶ 2 Exhibits: This Court admitted Exhibits 1 through 15, 17 through 41, and 43 through 57 without objection. This Court admitted Exhibits 16, 42, 58, and 59 over Ruff's objections.

¶ 3 Witnesses and Depositions: This Court admitted the depositions of Ruff (taken on December 2, 2019, and December 30, 2020) and Aaron Flanagan, MD (taken on December 10, 2019) into evidence. Ruff, James Acord, Fisher, and Josh Horton were sworn and testified at trial.

¶ 4 Issues Presented: This Court restates the issues from the Pretrial Order as follows:

Issue One: Is Ruff entitled to a lump-sum conversion of her PTD benefits

Issue Two: If Ruff is entitled to a lump-sum conversion of her PTD benefits, may Benefis assert a Social Security offset and recover past overpayment of indemnity benefits

Issue Three: Is Ruff entitled to costs for this action?

FINDINGS OF FACT

¶ 5 This Court finds the following facts by a preponderance of the evidence.^[1]

¶ 6 Ruff is a 41-year-old, divorced mother of two children, ages 22 and 19. She is engaged to James Acord, and they live with Ruff's younger son in a two-story apartment managed by Great Falls Housing Authority (GFHA).

¶ 7 Ruff has a congenital, left-upper-extremity amelia, i.e., her left arm ends just below her elbow. Ruff does not use an assistive prosthetic device and, from an early age, learned to do most things with her right arm and hand.

¶ 8 In her early twenties, after getting her GED and starting a family, Ruff decided to pursue a college education. Starting in 2003, and on and off until late 2017, Ruff took classes at Great Falls College MSU, which she funded through student loans. Although she never made enough money to pay anything back on those loans and did not even get credit for all of the courses she took, Ruff kept going back because she wanted to make a better life for her family and eventually become an LPN.

¶ 9 Although she worked, in addition to being a student, Ruff accumulated a significant amount of debt over the years. In 2014, she felt she needed to "just start over," and filed for Chapter 7 bankruptcy. In the end, she had over $65,000 of debt discharged.

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¶ 10 After undergoing financial education, Ruff made a concerted effort to reduce her costs and do a better job budgeting. But she continued borrowing money for school -over $50,000 in total.

¶ 11 In October 2017, Ruff was taking classes full time and working as a Certified Nursing Assistant (CNA) at Benefis. She earned about $12.50 an hour and worked 32 hours a week. Benefis was short-staffed and Ruff was doing more patient lifts and transfers than usual. Over the course of several weeks, she developed pain in her right shoulder.

¶ 12 On October 17, 2017, while performing her usual CNA duties, Ruff "noticed extreme weakness and pain in [her] right shoulder" that made it difficult to continue doing her job without help. She sought medical care and was eventually diagnosed with "chronic right shoulder pain with impingement syndrome and subacromial bursitis."^[2]

¶ 13 On October 23, 2017, Ruff filed a workers' compensation claim for her rightshoulder condition, which Benefis accepted as an Occupational Disease (OD).

¶ 14 While Medicaid paid for Ruff's regular healthcare needs, Benefis paid for her OD-related treatment.

¶ 15 Pursuant to a medical determination that Ruff had a 4% whole person impairment, Benefis paid her an impairment award of about $3,900. Ruff paid 20% to her attorney, about $1,800 to extinguish the loan on her 2006 Ford Taurus, and the rest for food.

¶ 16 Ruff continued working with Benefis, in a transitional duty assignment with accommodations, for three months before taking a medical leave. Benefis terminated her six months later.

¶ 17 Benefis concedes that Ruff is permanently totally disabled under the Montana Workers' Compensation Act (WCA) and is paying her biweekly permanent total disability (PTD) benefits at the rate of $244.27 per week. Ruff will reach full retirement age when she turns 67. In the meantime, however, she has applied to the Social Security Administration (SSA) for Social Security Disability Insurance (SSDI) benefits. She has yet to receive a decision on her application.

¶ 18 Ruff's monthly income is $1,061.41, calculated as follows:

Weekly PTD Benefit Rate	$ 244.27
Weeks/Year	x 52.143
Annual PTD Benefit	$12,736.97
Months/Year	÷ 12.00
TOTAL MONTHLY INCOME	$ 1,061.41

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On at least one occasion, Ruff has run out of these funds before the end of the month and had to wait up to a week to buy food.

¶ 19 Ruff splits most of her monthly expenses 50/50 with Acord. Acord is working a steady, full-time job after suffering several significant financial setbacks in recent years, including having a business fail, losing his mobile home to foreclosure, and having his wages garnished to pay off an emergency medical bill. He is earning between $2,500 and $3,500 a month and slowly paying off his credit card debt, which is about $1,600.

¶ 20 One of the expenses Ruff and Acord split evenly is rent. However, although they share the apartment, only Ruff's income is considered for purposes of calculating the rent because Acord is regarded as her live-in aide. The other monthly expenses Ruff splits evenly with Acord are those utility charges that exceed GFHA's $105 allowance; food costs; internet charges; and other household expenses/necessities of living/clothing. Ruff pays about 1/3 of the cellphone bill under an agreement with her parents, her kids, and Acord. Acord pays for Ruff's car insurance as she is on his policy. Sometimes with Acord's help, Ruff has been making the minimum payments - and sometimes more - on her credit cards.

¶ 21 Ruff keeps a journal where she writes out the dates she and Acord need to pay their bills. Each currently makes payments out of a separate account, but the couple plans to join the accounts once they are married. The amount of the bills for which Ruff is responsible and that she pays each month under her current financial arrangement is $794.75, calculated as follows:

Rent	$ 148.00
Utilities	$ + 17.50
Food	$ + 150.00
Internet	$ + 41.97
Other Household Expenses/Necessities of Living/Clothing	$ + 25.00
Cellphone	$ + 100.00
Car Insurance	$ + 0.00
Credit One Bank Card	$ + 30.00 (varies)
First Premier Bank Card	$ + 30.00 (varies)
Indigo Credit Card	$ + 40.00 (varies)
20% Attorney Fees on PTD Benefits	$ + 212.28
TOTAL MONTHLY EXPENSES:	$ 794.75

¶ 22 Since Acord moved into Ruff's apartment on September 1, 2020, and started sharing her expenses, Ruff has had a monthly surplus of $266.66, calculated as follows:

TOTAL MONTHLY INCOME	$ 1,061.41
TOTAL MONTHLY EXPENSES	$ - 794.75
TOTAL MONTHLY SURPLUS:	$ 266.66

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And she could increase that surplus by making such changes as limiting the use of her high-interest credit cards for discretionary purchases, like drinks at the convenience store and eating out, and planning better to avoid incurring overdraft and late fees from her bank.

¶ 23 The bulk of Ruff's debt consists of student loans. However, her principal and interest payments have been temporarily suspended. Ruff has some additional, smaller debts, which are accruing interest at high rates and/or are in collections. Although it has grown since then, as of October 2020, when she first met financial advisor Josh Horton, Ruff's total debt load was $58,067, calculated as follows:

Student Loans at 5.50% Interest	$43,386.00
Student Loans at 4.45% Interest	$ +5,138.00
Student Loans at 3.76% Interest	$ +2,737.00
AT&T Debt in Collections	$ +3,265.00
Hospital Debt in Collections	$...